Property Insurance Coverage

Coverage for direct or indirect property loss that can be analyzed under the following headings:

1. Peril a particular peril may be included or excluded. For example, the Standard Fire Policy names specific perils such as fire and lightning; the ALL RISKS policy covers all entities unless specifically excluded.
2. Property a policy may cover only specified or scheduled property such as an automobile; all of an insured's personal property up to a specified amount on each item regardless of its location (PERSONAL PROPERTY FLOATER); or all property of the insured with no specific limit (BLANKET POLICY).
3. Person the person covered must be specifically identified as the named insured in a policy. Residents of that household also covered are the spouse, relatives of either, and anyone else below the age of 21 under the insured's care, custody, and control.
4. Duration policies are usually written for one year; a personal automobile policy is usually for six months.
5. Limits limits are stated as a face amount in a policy. The insurer will never pay more than the lesser of the following amounts: limits stated in a policy; actual cash value of destroyed or damaged property; or amount resulting from the coinsurance formula.
6. Location a policy may cover perils that strike only the premises of the insured, or it may provide off-premises coverage subject to a geographic restriction. For example, the personal automobile policy covers only the U.S. and Canada.
7. HAZARD the exclusions and suspension section states that if the insured increases a covered hazard the company can suspend or exclude the coverage. For example, the insured starts processing explosives at home.
8. LOSS insurance contracts cover either direct or indirect (CONSEQUENTIAL) loss. For example, a homeowners policy covers damage due to the direct loss by fire, lightning, and other perils. It does not cover consequential losses such as loss of income by an insured who is unable to go to work because of fatigue.